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Vodafone facing questions over US and Japan
But CEO Sarin upbeat given latest set of quarterly stats

By Tony Hallett

Published: Wednesday 28 January 2004

Vodafone has taken the wraps off its latest set of key performance indicators (KPIs), revealing growth "slightly ahead of expectations", though challenges surrounding its operations in the US and Japan remain.

The giant operator now counts around 130.4 million individual customers around the world through its stakes in network operators. It recorded 4.3 million new customers from organic growth for the three months ended 31 December 2003 - its highest growth for three years - and 800,000 from stake changes, principally its increased interest in Greek operator Panafon.

Speaking in a conference call this morning, Vodafone CEO Arun Sarin attributed the growth to seasonal factors, focus and "the continued success of Vodafone Live!", which now encompasses 4.5 million users. Group COO Julian Horn-Smith called Live! "the single most successful product in the history of Vodafone".

The company is pleased with the increasing contribution data services are making to revenues. Their share stood at 15.9 per cent for the year to December 2003, up from 15.5 per cent in the year to September 2003. For the month of December in isolation the figure was 17.3 per cent, up from 16 per cent 12 months earlier.

Sarin said: "We will see the real push on data services when 3G is launched later this year."

He has previously talked about "volume" 3G handset shipments by the autumn of this year.

However, not all is well in the Vodafone empire. CEO Sarin refused to be drawn on a possible bid for AT&T Wireless in the US, which is now likely to be the subject of an auction that Vodafone may not be able to resist, despite it jeopardising its existing partnership with number one operator Verizon Wireless.

"We are watching developments as they occur," was his only comment on the subject.

In Japan, Vodafone's business - until recently J-Phone - has suffered from being around two years behind market leader NTT DoCoMo in launching W-CDMA-based 3G services and the success of KDDI with its CDMA-based offerings, which have experienced strong growth.

Sarin insisted that such difficulties - partly due to a saturated and sophisticated market - are not likely to be replicated in other territories.

He said: "Europe is more affected by service offerings than technology" given everyone uses the same standard, namely GSM and ultimately W-CDMA for 3G.